FX.co ★ EUR/USD: Forecast and trading signals on June 15, 2023. COT report. Detailed analysis of price movement and trades. Has the euro exhausted its growth potential?

5M chart of EUR/USD

EUR/USD traded higher on Wednesday. As we mentioned before, from a technical perspective, the pair's growth is quite logical as it needed to correct after a month-long decline. However, from a fundamental perspective, the euro's growth raised some questions again. For example, yesterday, the euro rose for almost the entire day and gained about 80 pips before the FOMC meeting, with only secondary reports on industrial production and producer price index in the US as macroeconomic events. Perhaps yesterday was a poor example since the market was clearly reacting to the results of the FOMC meeting. When the results were announced, the pair plummeted as the market began to take profit on long positions that were no longer worth holding.

There is only one trading signal worth noting. At the beginning of the US trading session, the pair surpassed the level of 1.0806 and managed to rise to the target level of 1.0868 before the FOMC meeting. It was around this level that long positions should have been closed, regardless of anything else. It didn't make sense to stay in the market ahead of such an important event as the announcement of the FOMC meeting results, especially since the trade was already in good profit. The sell signal should not have been executed as it formed too late in time, and the price could have gone in any direction.

COT report:

On Friday, a new COT report for June 6 was released. In the last 9 months, COT reports have fully corresponded to what is happening on the market. The chart above clearly shows that the net position of big traders (the second indicator) began to grow again in September 2022. At the same time, the euro resumed an upward movement. The net position of non-commercial traders is bullish. The euro is trading at its highs against the US dollar.

I have already mentioned that a fairly high value of the "net position" indicates the end of the uptrend. The first indicator also signals such a possibility as the red and green lines are very far from each other. It often occurs before the end of the trend. The euro tried to start falling a few months ago but there was only a pullback. During the last reporting week, the number of long positions of the "Non-commercial" group of traders decreased by 5,700 and the number of short positions rose by 1,500. The number of long positions is higher than the number of short ones. This is a very large gap. The number of long positions is 59,000 higher than short ones. The difference is more than three times. The correction has begun. Yet, it may not be a correction but the start of a new downtrend. At this time, it is clear that the pair is likely to resume a downward movement without COT reports.

1H chart of EUR/USD

In the 1-hour chart, the pair continues to form an uptrend, but there are no drivers for growth. We already warned you that this week's movements could be completely unpredictable due to the large number of important events. The euro may extend its technical upward correction, but it is also time for it to come to an end. Consolidation below the Kijun-sen line and the trendline could occur as early as today, indicating the start of a new short-term downtrend.

On June 15, trading levels are seen at 1.0537, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0943, 1.1092, as well as the Senkou Span B (1.0712) and Kijun-sen (1.0798) lines. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. Signals could be made when the price either breaks or bounces from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses.

Today, the European Central Bank will announce the results of its meeting, and the key rate is likely to increase by 0.25%, which the market has already anticipated. We still believe that there are no reasons for the euro to rise, and there won't be any today, regardless of the fundamental background. In the US, there will be reports on industrial production, retail sales, and jobless claims. These aren't that important.

Indicators on charts:

Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals.

Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines.

Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals.

Yellow lines are trend lines, trend channels, and other technical patterns.

Indicator 1 on the COT chart is the size of the net position of each trader category.

Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.